Generating cash is essential for any business, but not all cash-rich companies are great investments. Some produce plenty of cash but fail to allocate it effectively, leading to missed opportunities.
Not all companies are created equal, and StockStory is here to surface the ones with real upside. That said, here is one cash-producing company that excels at turning cash into shareholder value and two that may face some trouble.
Two Stocks to Sell:
Rapid7 (RPD)
Trailing 12-Month Free Cash Flow Margin: 19.2%
With its name inspired by the need for quick responses to cyber threats, Rapid7 (NASDAQ: RPD) provides cybersecurity software and services that help organizations detect vulnerabilities, monitor threats, and respond to security incidents.
Why Are We Out on RPD?
- Underwhelming ARR growth of 4.2% over the last year suggests the company faced challenges in acquiring and retaining long-term customers
- Estimated sales growth of 1.8% for the next 12 months implies demand will slow from its two-year trend
- Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
At $18.99 per share, Rapid7 trades at 1.4x forward price-to-sales. Read our free research report to see why you should think twice about including RPD in your portfolio.
Tutor Perini (TPC)
Trailing 12-Month Free Cash Flow Margin: 11.8%
Known for constructing the Philadelphia Eagles’ Stadium, Tutor Perini (NYSE: TPC) is a civil and building construction company offering diversified general contracting and design-build services.
Why Do We Pass on TPC?
- Flat sales over the last five years suggest it must find different ways to grow during this cycle
- Performance over the past five years was negatively impacted by new share issuances as its earnings per share fell by 32.4% annually while its revenue was flat
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Tutor Perini is trading at $67.01 per share, or 17.3x forward P/E. To fully understand why you should be careful with TPC, check out our full research report (it’s free for active Edge members).
One Stock to Buy:
S&P Global (SPGI)
Trailing 12-Month Free Cash Flow Margin: 34.6%
Tracing its roots back to 1860 when it published the first railroad industry manual, S&P Global (NYSE: SPGI) provides credit ratings, market intelligence, commodity data, automotive analytics, and financial indices that help investors and businesses make decisions.
Why Are We Backing SPGI?
- Annual revenue growth of 15.5% over the past five years was outstanding, reflecting market share gains this cycle
- Share repurchases have increased shareholder returns as its annual earnings per share growth of 18.4% exceeded its revenue gains over the last two years
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
S&P Global’s stock price of $482.84 implies a valuation ratio of 26.3x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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